Planning for Retirement as a Single Woman

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Planning for Retirement as a Single Woman

In past blogs, articles and social media posts alike, we’ve touched time and time again on the disadvantages faced by women when it comes to their finances. From unequal pay, to the “pink tax,” the scale has been historically tipped against females.

One particular disadvantage for women is retirement. Between their typically longer lifespans and typically smaller salaries, women have not been set up to succeed in their golden years. Whether you’re widowed, divorced, separated, or just single, planning for retirement is even more of an uphill battle for single women, making it absolutely critical to plan for this time period well in advance.

Here are 3 important steps to plan for retirement as a single woman.

  1. Create a rainy day fund

If you’ve been single for a long time or have never had a partner, you are probably used to relying on only one income. If you’re recently divorced or widowed, on the other hand, going from two incomes to one can be quite challenging. It can also be stressful, as you no longer have that extra income as a safety net to fall back on during times of hardship or illness. In fact, according to a 2016 Northwestern Mutual study, financial anxiety runs higher among single women (50%) than married women (41%). Ensuring that you have a rainy day fund in place can help to alleviate some of that stress. Try to keep at least a year’s worth of living expenses in a savings account, and as you near retirement age, bulk that amount up as much as possible. It’s also wise to look into disability insurance, so that in the event that you are out of work for a long time, you don’t have to sell off investments or deplete your retirement savings.

  1. Make a plan

It’s absolutely crucial to plan ahead when it comes to retirement, as the longer you have to save, the better off you’re likely to be. It’s particularly important for women to get ahead on their retirement planning, as they generally are paid less than their male counterparts. Additionally, women tend to live longer than men, so they should plan to save up for a longer retirement period. When putting together a retirement plan, be sure to consider the age you plan to retire, the cost of healthcare, where you will live, how much money you’ll need annually for any necessities, when you’ll start claiming Social Security, etc. By putting a plan in place early on, you have more time to look at the big picture and fill any gaps.

  1. Assemble a team

Growing old as a single woman means that you’ll want to take into consideration who will care for you as you age. Do you have adult children? Extended family? Trusted close friends? If you’re incapacitated, who will assist you with medical decisions, finances, appointments, and errands? Take the time to have honest and open conversations with anyone you are considering entrusting with your wellbeing. In addition to friends and family, make sure that you have an elder-law or estate-planning attorney, and possibly a geriatric care manager to assist with all things medical. Finally, be sure to enlist a certified financial planner to look at your comprehensive financial situation and help guide you as needed.

At The Humphreys Group, we welcome your unique financial challenges and are deeply committed to providing you with a comfortable, collaborative setting to explore your concerns. By listening to you, we seek to understand your goals and priorities, as well as what keeps you up at night. Our planning process has a single purpose: to manage your wealth so that you may live fully and confidently, especially during your golden years. Reach out for more information.